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How Much Did Twitter Lose Today?
Twitter, Inc. is an American communications company based in San Francisco, California. It operates the microblogging and social networking service Twitter. Twitter previously operated Vine, a short video app, and Periscope, a livestreaming service. Its stock price is down around 36% today. However, the company’s revenue increased 37% and it has a free cash flow deficit of $379 million. While there are several reasons why Twitter shares are down, the following four factors are the main ones.
Revenue surged 37% to
After reporting a big increase in revenue for the third quarter, Twitter is reportedly reviving its business. The company surpassed expectations for the first time, increasing its total sales by 37%. The company also announced a new $4 billion share buyback program, with half of that amount going towards accelerated share repurchases. See the article : How to Remove Twitter Followers. In addition, Twitter also expects to reach 315 million mDAUs by Q4 2023 and reach $7.5 billion in revenue by 2023.
In a statement, Twitter executives said the company will continue to make changes to its products and services. Among these changes are audio Spaces, which will take over top real estate on the feed. The company will also add a dedicated tab for Spaces. As the audio social trend continues to take hold, Twitter is hoping to benefit from this by boosting user engagement through audio. Its plans to make this happen are still unclear, but it’s a sign of its commitment to growth.
Target of 229 million daily active users
The Twitter company has missed its quarterly target by nearly two million daily active users. Twitter will report its latest figures on May 12. It also announced it has sold its business to Elon Musk for $44 billion. The company says it has added more users than analysts had expected in the first quarter, but the loss is not comparable to its rivals. Facebook and Meta reported more than one billion daily active users in Q1 2022. The social network has struggled to grow its user base in the past, and its metric has failed to keep up. However, Twitter has found a way to make up for the loss. Today, Twitter lost target of 229 million daily active users and recast its fourth-quarter numbers to 214.7 million mDAUs. Despite this shortfall, Twitter still beat analyst estimates for a sequential increase of 14.3 million users.
It is unclear what will happen next for Twitter. While the company has promised to protect free speech, its dependence on advertising revenue may have triggered this decline. It is not clear what the company plans to do to correct the situation, but the company may be beefing up with Russian President Vladimir Putin. See the article : Why Elon Musk Bought Twitter. In any event, Twitter shares have lost nearly 20 percent of their value. The company’s revenue grew by 26% in the first quarter, and its revenue was nearly $1 billion. Today, Twitter reports an average of 229 million daily active users.
Adjusted earnings of 61 cents a share
Twitter reported adjusted earnings of 61 cents per share today, a far cry from the $8 cents it had been predicting two months ago. The company blew past expectations for its quarterly profit, boosting its monetizable daily active user (mDAU) count by 16% year-over-year in Q1 compared with last year. Twitter also blamed lower revenue on a war in Ukraine. This may interest you : How to DM on Twitter. But the company is sticking to its core business plan: advertising. Twitter’s ad business increased its revenue 23% year-over-year, and its monetizable DAUs grew by 14.3 million sequentially.
In the wake of its second-quarter report, Twitter shares fell more than 10%, raising the question of whether or not the company is still worth investing in. Twitter’s executives were candid about the current state of the company during the earnings call, with chief executive officer Jack Dorsey saying that user growth is “sluggish” and that a turnaround will take time. But some employees said they were concerned about Musk’s focus on removing censorship and promoting “absolute free speech” at Twitter.
Free cash flow deficit of $379 million
Twitter has a huge cash flow deficit, but it is not clear what the company intends to do about it. The company has a recurring free cash flow deficit of $379 million through 2021, and its assets have almost doubled to $14 billion. However, Twitter’s free cash flow has been careening from a positive $856 million in 2018 to a negative $379 million in 2021. Twitter’s customer base is also flagging, with monetizable active users growing only by 10 million every three months through mid-2021, or halving in the 18 months ending December. Musk’s bailout has prompted a 24% decline in Twitter’s shares.
Musk’s threat to walk away from deal
Elon Musk has been pressing the issue of his proposed breakup of Twitter for several months. The billionaire has argued that Twitter has a large number of false and spam accounts and therefore should not be allowed to remain in the deal. Twitter says the amount of fake accounts is less than 5% but Musk believes it is much higher. He cites no evidence and claims to need data to support his contention. Twitter is standing by its projections but does not want to divulge any proprietary information about how it makes its projections. The disclaimer is also protecting the company from possible lawsuits.
Elon Musk is reportedly in talks with outside investors to lessen his stake in Twitter so they can earn higher returns on the company. However, Musk has said he is committed to the deal and is not walking away from it. That is a problem because Twitter’s stock has lost nearly 24% in less than a month because of Musk’s threat to walk away from the deal.
